City may launch incubator

Peoria aims to boost business, lure startups

Peoria is creating plans for a medical-device incubator to expand the city's economy beyond retail activities and to capitalize on its second-biggest industry, the medical field.

Incubators fill in the gap for budding entrepreneurs who may have a great idea but don't know how to execute it, including the patenting, legal and accounting side of starting a business.

The incubator would aim to attract a well-educated workforce and high-paying jobs to Peoria as the city pursues an economic base that's not concentrated on retail and service sectors.

Metro Phoenix has four incubators, including one in Surprise.

BioAccel, a Phoenix non-profit, could manage the incubator and help medical-device groups shape ideas into practical products that could be successful ventures.

The city has been in talks to lease 6,800 square feet of space from Plaza Cos., which owns Plaza Del Rio, a medical campus near Loop 101 and Thunderbird Road in Peoria.

City officials estimate that would be enough space for five startups and could be expanded if needed.

To get the incubator off the ground, Peoria would pay leasing costs and pay BioAccel to run the incubator, which could be set up as a non-profit. No cost estimates are yet available.

The Peoria Economic Development Advisory Board this month gave city leaders the OK to develop the plans.

The board could get a refined proposal in April and then that would go to the City Council.

The medical field already makes up nearly 20 percent of the city's employment base.

Scott Whyte, Peoria's economic development chief, cautioned the advisory board that the venture carries some risk and costs to the city.

"Dealing with startups is risky, and Peoria has not done this before," he said.

But if the plan moves forward and startups do locate in Peoria and bring high-end jobs, "It would ultimately be worth it," Whyte said.

BioAccel's expertise is in recruiting bioscience companies and accelerating technology through commercialization. It has ties with the Food and Drug Administration and National Institutes of Health.

Having the CORE Institute on board for its expertise in medical devices would help the venture take off.

The Phoenix-based institute is involved in orthopedic research and education.

If successful, the city hopes, in turn, to attract medical-device and supply-chain manufacturers to scoop up vacant commercial space in the city.

Maria Laughner, Peoria's business and real-estate development manager, cited a statistic from the National Business Incubator Association that shows a community gets about $30 in tax revenue for every public dollar invested into incubators.

A majority of startups tend to stay in the community after they graduate from incubator status, she said.

Still, it would be hard to estimate a return on the investment because one can't predict when any jobs would develop from the incubator's projects, Whyte said.

Whyte said people would have to give the incubator a gestation period. "We're not short-term day traders in this deal," he said.

Peoria is sticking to medical devices for its incubator plan to mitigate risks, Whyte said.

Rather than go for a broad-based bioscience incubator "that tries to be everything for everybody," this one would carve a niche for itself as the first such incubator in Arizona.

Peoria Mayor Bob Barrett, not averse to city investments in certain projects, agreed.

"You cannot grow and cannot advance without some risk," he said. "It's a question of whether the risk warrants the money."